Insurers have been urged to look into the details and feasibility of underwriting agriculture and livestock risk in Oman as a part of a government thrust aimed at ensuring sustainable development and diversifying the economy.
The issue was raised at a recent meeting at the Capital Market Authority (CMA) attended by representatives of the CMA, the Ministry of Agriculture and Fisheries, Oman Chamber of Commerce and Industry and insurers. The meeting was held to discuss agriculture insurance products in the Sultanate, reported the Times of Oman.
CMA Executive President Sheikh Abdullah Salim Al Salmi said in a speech that the agricultural sector needed insurance cover. Hence, the meeting was held to review the availability of insurance products in the sector as well as the obstacles to the expansion of insurance cover for this sector.
Mr Naser Ahmed Al Salehi, Director of Valuation and Risk Surveillance of CMA, reviewed the results of a study conducted by the regulator on insurance products for the agricultural sector and the viability of farm insurance products in the Sultanate. A survey was carried out through a questionnaire sent to all insurers.
He said the study showed that no insurance company is underwriting such risks in the Omani market, although there are prominent international insurance players operating in the Sultanate covering such risks in neighbouring countries.
Mr Al Salehi said that insurers are not underwriting agriculture risk in Oman because of a lack of expertise, difficulty in finding reinsurers, lack of loss assessors and inadequate marketing strategies.
He pointed out that 40% of insurers are ready to underwrite such risks in the near future, while 44% of nsurers believe coverage of such risks is viable.
Targeted segments
Dr Hilal Saud Al Ambosaidy, Director General of Agricultural and Livestock Marketing and Investment in the Ministry of Agriculture and Fisheries, said that the segments targeted for insurance cover in the initial phase are greenhouses, honey bee farms, poultry farms and dairy farms.
Mr Ali Abdulazim Al Lawati, Chairman of the Omani Insurance Association, gave a brief on the information required by insurers to underwrite agriculture risk, in particular the risks of natural calamities affecting crops.
This includes the number of farmers to be covered, the cultivated area, agricultural awareness and technical programmes. Insurers also need to know underwriting costs and whether or not coverage would be made available to small and medium enterprises.